The Department of Mineral Resources and Energy (DMRE) has officially announced the five preferred bidders for South Africa’s third Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP BW3). The announcement, made by the Minister of Electricity and Energy, Dr. Kgosientsho Ramokgopa, marks a major milestone in the country’s efforts to enhance grid stability through large-scale energy storage deployment.
Launched on 28 March 2024, Bid Window 3 attracted significant interest, with 33 bids submitted by the closing date of 28 November 2024. Following a rigorous evaluation process conducted under tight security protocols by an independent bid evaluation committee, five projects—each tied to a specific site in the Free State Supply Area—were selected, totaling 616 MW in awarded capacity and representing a combined investment of R9.5 billion.
Awarded Projects
Each selected project will contribute to grid reliability by providing essential ancillary services, including instantaneous reserves, regulating reserves, ten-minute reserves, and supplemental reserves. The successful bidders and their respective projects are as follows:
| Project Name | Developer | Substation | Contracted Capacity (MW) | CCR (R/MW/h) | Evaluation Price (R/MWh) | Total Score |
|---|---|---|---|---|---|---|
| Haru BESS | Scatec | Leander | 123 | 228.84 | 2,037.10 | 97.58 |
| Bloemhoek BESS | Mulilo | Theseus | 124 | 204.30 | 1,801.24 | 98.16 |
| Erfdeel BESS | Mulilo | Everest | 123 | 203.47 | 2,157.29 | 98.16 |
| Vanilla BESS | Mulilo | Harvard | 123 | 205.94 | 2,169.80 | 98.16 |
| Retreat BESS | Mulilo | Merapi | 123 | 235.32 | 2,477.86 | 98.16 |
Mulilo emerged as the dominant developer, winning four out of the five project sites, while Norwegian renewable energy firm Scatec secured the fifth.
Competitive Pricing and Economic Impact
The third bid window showed a significant drop in cost, with evaluation prices decreasing by 40% and 8% compared to Bid Windows 1 and 2 respectively, demonstrating growing competition and efficiency in South Africa’s battery energy storage market.
The awarded bidders have made extensive socio-economic commitments:
- Black Shareholding: A minimum of 40% black ownership in project companies, 30% in construction contractors, and 42% in operations contractors.
- Job Creation: 852 job opportunities for South African citizens, measured in job-years, during both construction and operational phases.
- Local Content: Over R3.7 billion is earmarked for local sourcing during construction and maintenance.
- Preferential Procurement: Includes R3 billion from B-BBEE businesses, R1.3 billion from black-owned enterprises, and over R500 million directed to black women-owned businesses.
- Community Development: An additional R184 million has been pledged for supplier and skills development, bursaries for black students, support for disabled individuals, enterprise development, and socio-economic upliftment.
The BESIPPPP is a cornerstone in the country’s broader Integrated Resource Plan (IRP), designed to diversify the energy mix and fortify the power system against supply constraints.
